An overview of the distribution channel for your marketing strategy. Learn to understand how to pick your distribution, how to sell, the profit margins, relationship building, and internet - ecommerce distribution.

1. ì
Distribution Channel
A
Best
Prac+ce
Guide
For
Your
Marke+ng
Strategy
Process
By:
Wayne
E.
Chen
©
2011
–
Wayne
Chen

2. Learning
Objective
ì Distribu+on
Channels
ì Deciding
on
distribu+on
channels
ì How
to
reach
customers
ì Players
and
profit
margins
ì Channel
rela+onships
ì Internet
distribu+on
©
2011
–
Wayne
Chen

3. Distribution
Analysis
ì What
are
the
avenues
to
the
consumer?
ì Have
mul+ple
ways
to
reach
your
customers
ì Importance
of
distribu+on
channels
ì The
price
charged
ì The
profit
margins
©
2011
–
Wayne
Chen

4. Distribution
Questions
ì Three
ques+ons
ì How
can
my
product
reach
the
consumer?
ì How
much
do
the
players
in
each
distribu+on
channel
gain
in
profit?
ì Who
holds
the
power
in
each
of
the
distribu+on
channel?
©
2011
–
Wayne
Chen

5. Reaching
Customers
ì ID
Channel
Intermediaries
ì Cereal
>
Wholesaler
>
Retailer
>
Customer
ì Outline
all
paths
ì Develop
plan
ì Loca+on
ì Time
ì Costs
ì Margin
ì Shopping
©
2011
–
Wayne
Chen

6. Channel
Intermediaries
ì Most
common
ì Wholesalers
ì Distributors
ì Sales
Representa+ves
ì Sales
Forces
ì Retailers
©
2011
–
Wayne
Chen

7. Distribution
Players
+
Profit
ì Design
your
channel
for
pricing
and
profit
ì Players
take
a
cut
from
the
manufacturer
ì Channel
par+cipants
in
most
industries
calculate
their
cut
as
a
markup
on
selling
price
©
2011
–
Wayne
Chen

8. Selling
Price
+
Profit
ì The
selling
price
is
not
the
( )
ul+mate
retail
price,
but
the
Percent
$
Markup
price
at
which
one
Markup
on
Selling
=
$
Selling
Price
X
100
intermediary
sells
goods
to
Price
(SP)
the
next
intermediary
in
the
chain.
Selling
Price
X
(
1
-­‐
Markup
%)
ì The
retail
price
is
what
a
consumer
pays
=
The
Preceding
DistribuFon
Level’s
Selling
Price
©
2011
–
Wayne
Chen

9. Distribution
Mock
up
Channel
Channel
Next
Level
Margin
ParFcipant
FuncFon
Selling
Price
Selling
Price
Mr.
Hui
Laborer
$2.00
Fox
Con
Manufacturer
$30.00
93%
Merino
LLC
Transporter
$35.00
14%
Apple
Inc.
Retailer
$550.00
93%
Eric
Smith
Consumer
$550.00
+Tax
-­‐
©
2011
–
Wayne
Chen

10. Channel
Power
ì Selec+ng
where
to
sell
ì Packaged-­‐goods
companies,
ì Unique
products
,
large
and
small
manufacturer
dictates
the
ì Cost
of
slogng
fees
to
terms
reserve
space
ì Not
unique,
channel
dictates
margin
terms
ì Example:
Grocery
Trade
ì Shelf
space
and
SKU
ì Planograms
©
2011
–
Wayne
Chen

11. Internet
Distribution
ì Great
way
to
sell
with
lihle
or
no
costs
ì Excellent
reach
ì Internet
Marke+ng
–
Four
Cs
ì Commerce
ì
(24
hour
sale)
ì Content
ì (Informa+on
and
research)
ì Customer
care
ì (
Access
to
account)
ì Convert
Leads
ì (
From
TV
or
PR)
©
2011
–
Wayne
Chen